In a dispute the appraiser is rarely the one who picks the definition of value. It is fixed before the analysis starts — by the governing statute, the cause of action pleaded, the controlling agreement and the law of the forum — and what that definition means is a question of law rather than a matter of expert opinion.
Start a conversation with the Valuation Concierge, already scoped to standards of value. Select a subject area to prompt it, or describe the matter directly.
Four things are fixed from outside the appraisal: which definition of value governs, the date the analysis is anchored to, the circumstances it is permitted to assume, and which adjustments to the base value are available. Some are settled before an appraiser is engaged and some are litigated, but none of the four is an appraisal judgment, and the profession’s own mandatory standards concede as much. ASA BVS-VIII §IV requires a comprehensive written report to reference the statute where a valuation is performed pursuant to one, and to state and define the standard of value, the premise, the level of value and the effective date separately. USPAP’s JURISDICTIONAL EXCEPTION RULE runs the same way: where an applicable law or regulation precludes compliance with part of USPAP, only that part becomes void for the assignment — and its comment adds that ‘Instructions from a client or attorney do not establish a jurisdictional exception.’ Law displaces the professional standard. Counsel does not.
Which definition governs, what the analysis may assume about circumstances and timing, and which adjustments to the base value that definition permits — in the order a court works through them, because each answer constrains the next.
Two definitions decide most disputes, and the difference between them is not a matter of degree — one is a regulatory construct and the other changes content with the statute you are standing in.
investigateTwo separate assumptions the law fixes about timing and circumstances — and in several proceedings the act of filing sets the date before anyone is retained.
investigateA question of law before it is a question of evidence — and never a benchmark to shop from, which is the practice the IRS’s own internal valuation guidance warns against.
investigateThe work of establishing the framework a valuation has to be built inside, none of which is financial analysis.
Not the appraiser, in almost any contested matter. The governing statute, the cause of action pleaded, the controlling agreement and the law of the forum supply it, and courts treat the choice as their own. In Pueblo Bancorporation v. Lindoe, Inc., 63 P.3d 353 (Colo. 2003), the Colorado Supreme Court held that ‘The interpretation of statutory language is a question of law which we consider de novo,’ and that the meaning of fair value is ‘a question of law, not a question of fact to be opined on by appraisers and decided by the trial court.’ Nebraska put the review standard the same way in Bohac v. Benes Service Co., 310 Neb. 722, 969 N.W.2d 103 (2022): statutory interpretation is a matter of law on which an appellate court reaches an independent conclusion irrespective of the court below. The expert applies the standard. The court supplies it.
No, and conflating the two layers is the most expensive misreading available here. What the standard means is law — briefable, appealable, and decided before an appraiser opens a spreadsheet. What the number is under that standard is not: the method, the inputs and the conclusion are the trial court’s to find, and an appraisal award is reviewed with significant deference to those findings, for abuse of discretion (Fir Tree Value Master Fund v. Jarden Corp., Del. Supr., July 9, 2020). That asymmetry is where the leverage sits. A brief that attacks the definition is arguing on de novo ground; the same argument recast as a critique of the other side’s discount rate is arguing uphill against deference.
Not the four that are usually recited, and the fourth item on that list is the error. The 2022 International Valuation Glossary — Business Valuation, published jointly by ASA, CBV Institute, RICS and TAQEEM, labels Fair Market Value, Market Value, Fair Value and Investment Value each as ‘a Standard of Value.’ Intrinsic Value is defined in the same glossary without that label: it is ‘the value that an investor considers, on the basis of available facts, to be the "true," "real," or fundamental value that will become the Market Value when other investors reach the same conclusion.’ That is an analyst’s view of worth waiting to be vindicated by a market, not a definition a tribunal can impose. ASA BVS-VIII IV.C illustrates with ‘fair market value, fair value, investment value, or other’ and omits intrinsic value as well. The trap to avoid: Delaware’s 1950 decision in Tri-Continental Corp. v. Battye, 74 A.2d 71, calls appraisal fair value ‘the true or intrinsic value’ of the stock — archaic phrasing inside the fair value standard, not a separate one.
Not reliably, and the direction depends on what the statute excludes rather than on the words themselves. Where the exclusion is shareholder-level discounts — the MBCA-derived formula ‘Without discounting for lack of marketability or minority status’ — the effect is to push value up toward a proportionate slice of the whole. Where the exclusion is merger-arising value, it runs the other way. Section 262(h) directs the Court of Chancery to determine fair value ‘exclusive of any element of value arising from the accomplishment or expectation of the merger …,’ and in Verition Partners Master Fund Ltd. v. Aruba Networks, Inc., 210 A.3d 128 (Del. 2019), the Delaware Supreme Court ordered judgment at $19.10 per share — ‘the deal price minus the portion of synergies left with the seller’ — against a $24.67 deal price. Fair value is a definition, not a direction.
On whether the number is the remedy or evidence of a loss. If a tribunal’s job is to fix a value and that value is the outcome — an appraisal award, a buyout price, a taxable base, a marital share — it belongs here, and no wrongful conduct need be proved for the number to matter. If liability and causation gate it, and the number compensates for conduct measured against a world that did not happen, it is a damages question. Business enterprise value used as a damages measure is squarely the second kind: lost business value and diminution in value are measures selected against lost profits under damages doctrine, they require a but-for enterprise, and our Economic Damages Institute publishes them at economicdamagesinstitute.com. The same site covers contested public-company merger appraisal, disgorgement, reasonable royalty and solvency. This Institute cross-links to all of it and develops none of it.
Describe the proceeding and the interest at issue. The Institute will help you see which questions in it are decided as law and which are left to the factfinder.